What is the true definition of a stop loss order?

[BizTechTrader]

Something strange happened to me today. I had a stop loss order in place that got taken out below the LOW. For example, the price was $18.70 (day low) and my order got taken out at $18.67 (the only order at that price - the exact low!) without prompting.

I had thought a stop loss order meant that if another trade took place at my stop limit price then the stop would (could) be triggered immediately at the market. Apparently that is not the case since mine was the one and only print at that level, within .02 actually. It was as though my order was sold at a limit rather than a stop. For a good 20 minutes my print was still below the quote low, until it was updated. Is it possible that somehow somewhere the price hit 18.67 but did not show up on the tape? Or did they dump my shares?

Any experiences with this? Thoughts? I think I have just become a fan of mental stops..

 

[Hotch]

You will have sold at the bid, is your chart the ask/mid price?

 

[BizTechTrader]

That is my point. I thought a stop loss meant that the price must have already hit my limit, rather than me selling on the bid. Not sure what you mean by ask/mid? I was looking at the print on time and sales...

 

[maxima]

wait for the day close and get official HL from the exchange and then call the broker and ask for reimbursement.

in fast markets trades can get messed up and then edited. what your chart shows isnt something you can take to the court. but official exchange data - you can.

who is your broker?

 

[TheBramble]

Which stock and how was it routed?

 

[BizTechTrader]

wait for the day close and get official HL from the exchange and then call the broker and ask for reimbursement.

in fast markets trades can get messed up and then edited. what your chart shows isnt something you can take to the court. but official exchange data - you can.

who is your broker?

This is of course assuming that the price isn't taken out at any point until the close.

Fidelity.

Won't my sale (day low and only print at that level) show up as official exchange data though? My chart is showing my print now as the current low... so if it does register (and why wouldn't it?) I'm SOL?

 

[BizTechTrader]

Which stock and how was it routed?

ERY. Stop Limit order at 18.67 gtc

 

[maxima]

My chart is showing my print now as the current low...

If that then I dont understand - what was the question again ?

 

[BizTechTrader]

If that then I dont understand - what was the question again ?

As I stated, my sale price was below the low for about 20 minutes, after which point the low was updated to reflect my print. The question is what is a definition of a true stop loss limit order, and can a stop limit be executed at the bid on a new low.

 

[maxima]

so you have 2 questions. 1 is why the delay of the price update (call your broker but what would be your complain?). 2 - i still not clear what are you asking. was it stop order. or stop limit order. and what was the the levels of stop and limit and what is the difference - was it low or not. high/low are normally prints (trades) if nothing was happening above below then it was not high/low.. am not getting it again...

 

[BizTechTrader]

...

This was the print at the low:

18.713
18.716
18.70
18.70
18.71
18.70
18.67 - ONLY my shares were traded at this level (same # in T&S as my order)
18.71
18.85
etc.

As I stated, I thought that a stop limit was not to be executed at the bid, but at the market immediately once the limit was hit. My limit wasn't "hit," so I am asking if a stop limit can be executed at the bid or at the mid-spread.

 

[TheBramble]

Believe OP is asking why his stop was triggered and was the only print at that level today when he expected it to become a market order ONLY if the price traded down to it.

 

[wackypete2]

You are confusing your order types and you need to be careful using a stop loss LIMIT order. If the price gapped down through your limit order price you would not have been stopped out and could have suffered additional losses.

Your order appears to have been correctly filled if the bid price hit 18.67 which it very well may have since it looks like your order was filled just after the open when bid/ask prices could be wider than normal.
This is straight from the TDAmeritrade order guide:

By placing a sell stop limit order, you should understand that once the bid price is equal to, or lower than your stop price, a limit order will be activated. Such orders establish a minimum price at which the security will be sold, but you run the risk of not exiting the position if the stock moves quickly below the limit price. A stop-limit order is often placed with the same price for the activation and limit, but does not need to be so, and should be set according to your personal preference.

The bid hit 18.67, your sell limit order can only get filled at 18.67 or higher, which it did. In reality the bid price could have been a penny or 2 lower but if no trades were transacted at that price you wouldn't know it.

Peter

 

[BizTechTrader]

Thanks Peter.

 

[wackypete2]

Thanks Peter.

You're welcome.

Peter

 

[maxima]

so you had sell stoplimit with stop price 18.67 and limit price someth else (say 18.65). is that right ?

the limit price is not trigger price. your stoplimit meant - sell between 18.67 and 18.65. if price gapped to 18.64 your order will never be hit.

where is beginner Joe when he is needed? trading vendor placing live orders having no clue what they mean.... superb.

 

[maxima]

didnt see the Pete answer... spot on

 

[leonice]

that's what is referred to as a slippage

 

[Bint_Crusher]

Your Broker is your BITCH (BBC Anton Kriel). Ring him and tell him so, otherwise google price slippage.

 

[maxima]

you've crushed wrong bint mate